Question: Mars Technologies is considering setting up a plant in a foreign country. The plant will have an estimated useful life of 4 years and the

Mars Technologies is considering setting up a plant in a foreign country. The plant will have an estimated useful life of 4 years and the estimated costs of setting it up are $20 million. The company's CFO has estimated the following cash flows associated with the new plant:

Year 1 = $5.8 million

Year 2 = $7.9 million

Year 3 = $8.6 million

Year 4 = $10.5 million

The company is concerned about its current exports to the foreign country, which are expected to be reduced by $1,200,000 for each of the 4 years. Given that the company's required rate of return is 12%, what is the NPV of the project?

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